Study exaggerates jobs lost to China

THE ISSUE

A new study concludes that China has taken 2.3 million jobs from the United States, including 4,100 from Hawaii.

America's trade deficit with China has more than tripled in this decade, but a Washington think tank's translation of that to U.S. job losses is simplistic. Its conclusion that China has taken away 2.3 million American jobs, including 4,100 from Hawaii, in the past seven years fails to consider transfer of work to China from other countries with cheap wages.

The study, authored by Economic Policy Institute economist Robert Scott, asserts that displaced U.S. workers lost an average of $8,146 in wages last year, totaling $19.4 billion. The annual trade deficit has grown from $84 billion to $262 billion since normalization of trade relations with China in 2001.

The study "assumes that every product imported from China would have been made in the U.S. otherwise, which is clearly wrong -- several decades wrong, in fact," says John Frisbee, president of the U.S.-China Business Council. He points out that Sony TVs imported by the U.S. were made in Japan but now are made in China.

Likewise, many garments imported to the U.S. during the 1990s were made in the Northern Mariana Islands by Chinese workers in factories transplanted from China. The Marianas' apparel industry now is on the decline because of increased minimum wages, higher than in China.

Of course, moving factories and workers back to China from the Northern Marianas has no effect on Hawaii's garment industry. Hawaii's job count in the textile and apparel sector increased last year by nearly 4 percent, to 2,687 jobs.

Overall, normalization of trade relations spurred a 27-fold increase of Hawaii exports to China, reaching $133 million in 2005. More than 20 percent of Hawaii jobs are tied to foreign trade, a higher proportion than in any other state, according to the Washington-based Business Roundtable.